Slate Asset Management, headquartered in Toronto, Canada, is a global alternative investment platform targeting real assets. Slate focuses on fundamentals to create long-term value for investors and partners. Slate’s platform has a range of real estate and infrastructure investment strategies, including opportunistic, value add, core plus, and debt investments.
The SHURE Initiative recently caught up with Veronica Green, Vice President of Development at Slate Asset Management. Green will participate in SHURE Vancouver & Western Canada on March 26-27 at Simon Fraser University in Burnaby. Green will join other opportunistic investors in the student accommodation arena at SHURE Vancouver and Western Canada. Indeed, all active stakeholders in university real estate and private-sector housing will attend and participate in this high-impact forum.
SHURE: Veronica, tell us about Slate Asset Management.
V.G.: We’re a global asset manager and real estate investor. I’m on the development team – we oversee the complete development and acquisition life cycle through construction, sales, and closeout. We are actively looking, underwriting and marketing sites across all asset classes including PBSA.
SHURE: How would you describe the current climate for acquisitions and new development?
V.G.: Given the current macroeconomic environment, capital raising is challenging. Speaking specifically to PBSA – we can acknowledge a few things that work against Canada upfront: many investors worldwide still see our country as a niche market. In the core assets, the pension funds still dominate. We don’t have as deep a banking system or access to credit, but we do have some things that work very well for us: Canada is smaller, and there’s less competition, so when you talk about PBSA, it is all about the fundamentals.
In addition, Canadians are mobile, and we’re a fast-growing population. Notably, enrollments are increasing and consistent across international and domestic student populations at our universities.
And let’s face it: the way university fees are structured, you have to keep getting students in the door and on campus so that they can sustain themselves.
SHURE: How do you think Canada compares to the U.S. from an investment perspective?
V.G.: We don’t have the same scale, but the robust metric we can show investors relates to the provision rate. So, students to bed, we’re at 12%! When we talk to investors, it’s an easy opportunity to communicate or articulate this supply and demand, especially limited supply and growing, consistent demand.
SHURE: How would you describe your conversations with investors from the G7 countries and Eurozone?
V.G.: We see interest in Canada from select countries from the E.U.: Germany and the U.K. We remain too niche, too small for many Asian investors.
When discussing PBSA and looking for new relationships, the focus is on execution opportunities being viewed on a case-by-case basis. The yield conversation is tough to have with the U. S. investors. However, if you’ve got a track record, a dedicated internal team, strong relationships, and boots on the ground, you can be successful.
SHURE: You seem too optimistic in this unusual macroeconomic environment.
V.G.: As developers, we all have to be optimistic – seek opportunities that other may overlook, and jump up and down with a smile.
SHURE: As a growing and active investor, what do you think of the Canadian government’s involvement in higher education and financing real estate?
V.G.: This is very close to home, having spent time on the other side as a political staffer. While I appreciate the frustration from industry – red tape – and the public sector – no money – the collective enthusiasm is the bottom line. We need to jump up and down and say, here’s where we have to go. Individuals in the real estate industry need to find a counterpart, like someone at CMHC, willing to do a pilot program for a long-term financing program. It’s finding that individual in the public sector that you can say to, “Let’s do this together”. It’s us coming together in these SHURE events to eliminate a lot of red tape. And what does that mean? Like incentive programs, and they don’t need to be monetary, but let’s try and control some of those levers in the proforma, like convincing our municipalities to go straight to building permits as of right zoning in areas where you should have high-density student housing close to campus.
I’m trying to find success and ways to push this dialogue forward by finding that counterpart on the other side willing to go a little bit farther to say, “Yes, this is what we need to unlock a much-needed housing supply.”
SHURE: Why is the conversation about affordability in Canada meaningful?
V.G.: It’s a great time to have this debate because it’s timely. Everyone’s talking about affordability, and there have been some encouraging moves, but Greater Toronto Area construction was on a nine-quarter downtrend, and I don’t think we’ll see it pick back up or swing after the recent GST HST announcement. So, again, it comes down to enthusiasm, from my perspective.
SHURE: Why do you remain excited about student housing as an asset class?
V.G.: What do you mean “remain excited”? It’s new. It’s exciting. What about the long term here? PBSA can potentially be one of Canada’s best-performing asset classes. It’s a nascent asset class compared to more mature markets like the U.S. and the U.K.
Canada has traditionally had a pretty conservative lending market. That means that all our debt and capital went to office and retail. However, we’ve finally got institutional interest in PBSA. We finally have all levels of government talking about a housing supply shortage. We’ve got these fantastic fundamentals and sustained and consistent growth in our enrollment and international student population.
So, why not be optimistic? We’ve got to beat the chest of what’s excellent in Canada: World-class institutions, mobile population, diverse populations. Like most property types, PBSA has battled the pandemic and rising inflation, and the asset class has been relatively resilient.
I think there’s a lot to be optimistic about!
Related SHURE Initiative Event: SHURE: VANCOUVER & WESTERN CANADA | March 26-27, 2024 Simon Fraser University, Burnaby, British Columbia
